With little time left before the November 24 deadline in the nuclear talks between the six world powers known as the P5+1 and Iran, and considerable uncertainty about whether a deal will be reached, it is a good moment to examine Tehran’s thinking about the possibility that no deal will be struck.

Much international commentary offers a shorthand analysis of what will happen should talks fail. Iran will resume uranium enrichment, and the United States will ratchet up sanctions, with the great unknown being how the world—that is, everyone else from Europe to India to China—will react. The nature of this reaction will depend on the interpretation of why they did not reach a comprehensive deal at the negotiating table and, based on this assessment, what exactly the Iranian government and its Western counterparts will do.

The personal interactions, the politics, and the economics surrounding the deal show that on balance, Iran appears to be better positioned for a no-deal scenario than the West, in particular the U.S. government. If a deal is not reached, Tehran is ready to try to win the world over to its side in a war of words where the truth is hard to find. Self-righteous blustering will only backfire; instead, the transatlantic allies need to carefully manage the possible fallout from a failure of the negotiations.

Two Presidents and a Supreme Leader

Many Western analysts see Iran’s president, Hassan Rouhani, as the leader most needing to reach a deal. A common view in Western circles is that Iran agreed to enter into negotiations because international sanctions are pressuring the government of the centrist Rouhani, elected nearly eighteen months ago for promising change, to deliver.

The thinking goes that he has banked his presidency on an accommodation with the international community that would allow Iran to shed its status as an economic and a political pariah. He needs a lifting of sanctions to pursue the other part of his agenda, which involves promoting a more liberal society at home. Without broader economic relief, he has no chance of taking on the hardliners in Iran.

Yet in fact, the Iranians believe—rightly or wrongly—that they are in the stronger position and are able if need be to walk away from the talks. They see time as being on their side, not least because the rise of the self-declared Islamic State in neighboring Iraq has turned what they previously perceived as a Sunni-Shia struggle aimed at them into a Sunni-Sunni fight playing out in Arab countries around the region.

What is more, many Iranians see U.S. President Barack Obama as the one most needing a deal, given how short he is on foreign policy successes. With the Middle East peace process derailed and major parts of the region on fire, Iranians assume that the United States wants to balance its reluctant military reengagement courtesy of the Islamic State with a détente with Iran. Moreover, they see the international sanctions alliance as having reached its pinnacle, with Russia now itself a target of sanctions and China, India, and South Korea less obliged to follow American preferences in the face of a U.S. withdrawal from Afghanistan.

Most importantly, Washington has more to lose at home in the event that no deal is reached. While Barack Obama would face a “told you so” backlash if a deal were not reached from a Congress that is now heavily dominated by the Republican Party, the system in Tehran would laud both Rouhani and his foreign minister, Mohammad Javad Zarif, for defending Iran’s interests against a malicious West. In Washington, the U.S. negotiators might end up being accused of having been naive idealists who wasted time trying to work with scheming Iranians. The Iranian interlocutors, in contrast, would likely receive a hero’s welcome for standing firm. If Tehran’s most capable and moderate negotiators could not get the United States to agree, it would be said, it was not their fault. Instead, America’s unwillingness must have been the problem.

Despite those potential laurels, Zarif—Rouhani’s clear choice to lead negotiations—might step down voluntarily if the talks failed completely with no chance of resuming them within a year. Alternatively, the hardliners might demand his head, if only to further clip the feathers of the Rouhani government.

Rouhani, however, would likely remain in office for the rest of his term, not least in the interest of broader political stability. Whether Rouhani would end up becoming the first one-term president in Iranian history would depend on his ability to stabilize—if not improve—the state of the economy. He has embarked on a number of reforms, from cutting subsidies to terminating inefficient megaprojects to tackling corruption, that have helped bring down inflation and restore modest growth. In the wake of a failure of the negotiations, the United States would try to muster an international coalition for another sanctions push aimed at derailing those efforts.

By repeatedly declaring publicly that he does not trust the Americans but will (graciously) give negotiations a chance, Khamenei has hedged his bets for either success or failure. Like many hawks in Washington, he would feel vindicated by failure, and he would benefit from Rouhani needing to align with him even more closely. He has already managed to turn Rouhani’s election into a signal of popular support for the regime, claiming that a victory for a revolutionary of 1979 was a triumph for the Islamic Republic.

Finally, unlike Obama, Khamenei is not personally wedded to a successful outcome of the talks. Moreover, with Rouhani and Zarif not being Khamenei’s close allies, a failure would not be associated with the supreme leader personally—as would have been the case if their principalist, or hardliner, predecessors were still president and lead negotiator (Mahmoud Ahmadinejad and Saeed Jalili, respectively).

Moderation Will Be Off the Table

Rouhani’s presidency of “hope and prudence,” meanwhile, may not last. If the negotiations failed, that approach would be over even if Rouhani himself remained in power. Politics would revert back to its state before the centrist was elected, which is more hardline in orientation, although there would be fewer quarrels within the conservative camp given a pliant president. More than before, the supreme leader via his representatives in each department would be determining the policies of the government, with some more reform-minded ministers choosing to leave.

In this scenario, with the principalists’ overall access to the levers of power and Rouhani’s inability to fulfill his election promises of change and moderation, the hardliners would most likely win the next parliamentary election. This will be held in March 2016, jointly with the vote giving another eight-year term to the Assembly of Experts, the body officially charged with selecting the supreme leader and supervising his work. This first-ever twin election would probably provide Rouhani’s opponents a boost ahead of the 2017 presidential election.

Despite Rouhani’s reform mandate from his sweeping first-round victory in the summer of 2013, a public backlash against such a hardline turn—barring an economic slump worse than 2012–2013 when Iran’s economy shrank by 5.8 percent—would be unlikely. Iranians see the turmoil around them, whether in Egypt, war-torn Syria, conflict-riddled Iraq, or collapsing Libya. Those old enough to remember the violence that followed the Islamic Revolution are happy to choose bad over worse and stick with the hardliners rather than see chaos engulf the country. The younger generation, in contrast, no longer has the energy for unrest after the failure of the opposition Green Movement in 2009. For people in their twenties and thirties, questions of jobs and family have become more important than sacrificing their lives—both literally and metaphorically—for the public good. They see that the system has already begun to change and may prefer to simply wait out the coming conservative counterstrike.

The question of whether and when Iran would resume producing 20 percent enriched uranium (which could be relatively quickly enriched further to make nuclear-weapon fuel) would depend on the terms of the failure of the talks—and on the U.S. reaction. Certainly if the United States were to increase sanctions, Iran, as a sign of defiance as much as in order to build a stockpile for the future, would return to this uranium enrichment level, which it discontinued under the November 2013 Joint Plan of Action. It would seek to double its enrichment capacity by operating all available centrifuges, and it would continue research and development on new centrifuges.

This notwithstanding, Iran would continue to claim that enrichment is not about getting the bomb. It would stick to its narrative that a nuclear weapon would not advance its security and that it is pursuing a nuclear program in line with its international rights and domestic needs. The latter have a future-oriented component in that they explicitly include potential needs of a bigger program and, more implicitly, perceive a large stockpile as a bargaining chip when the talks one day resume.

Interestingly, while an outright collapse of the talks would seriously affect the psychology of future negotiations, limited cooperation with the West would still be possible on other issues. After all, Iran has an interest in solving the conflicts in its neighborhood, from the war in Syria to the fight against the Islamic State. What is more, if talks were to fail, Iran’s interest in assuring its Gulf neighbors of its good intentions would increase. That is because without the constraints that an internationally approved accord would place on Iran’s nuclear program, rivals like Saudi Arabia would feel compelled to go down a nuclear path and to confront Iran in a conventional power play, thus considerably limiting Tehran’s room for maneuver.

The Economy—Can It Get Worse?

Despite the regime’s principled claims to the contrary, its adjustment to a failure of the negotiations would depend on the state of the Iranian economy.

The regime says it has contingency plans for a resistance economy and that it can switch its mode of doing business if it has to. This would mean drastically reducing trade with the world in favor of relying on its internal resources—raw materials, the domestic workforce, and local industries.

Whether Iran can actually rely only on itself in this way will depend on how the country has fared following the toughest sanctions that began in early 2012. The “resisters” see three arguments on their side.

First, while new sanctions imposed after a failure of the talks might be harsh, they would be bearable after the experience of adjusting to a comprehensive sanctions regime over nearly three years. Moreover, many Iranians expect that both Russia and China would provide escape routes for Iran, either by publicly disavowing the sanctions—if, in their view, the West was at fault for the failure—or by quietly circumventing them, for both economic and strategic interests.

Second, Iranians expect to be able to muddle through—people would suffer but not despair, the argument goes—and the benefits of a deal are somewhat intangible. Insiders have been making gains from methods developed to circumvent sanctions, but a deal would only bring economic benefits to the whole population at some point in the future. It is difficult for the few to give up their immediate benefits for the long-term good. More broadly speaking, some expect a rally-around-the-flag effect in the face of renewed economic and political threats after a failure of negotiations, while the potential benefits of a deal would only drive more wedges between Iranians.

Finally, the elites believe they have found competent economic managers in Rouhani and his team. Admittedly, the comparison to the previous Ahmadinejad cabinet—whose legacy is commonly described as one of erratic economic management—is not quite flattering, but in taming inflation and cleaning up the economy, Rouhani has some real achievements to show.

The hope is that these leaders would be able to keep the economy somewhat stable until nuclear negotiations resumed in one or two years. Once they did, Iran would feel it had entered negotiations from a position of strength, having survived, as they would perceive it, another unjust onslaught of Western arrogance.

Whether this happens depends on the perseverance of the Iranian people and the cohesion of the international coalition demanding that Iran come clean on its nuclear program. While the United States is bent on increasing economic sanctions to the point of a full embargo to make Iran compromise, the real effect of any U.S. measure would hinge on whether other parties support the approach—Washington’s European allies or China and Russia, as well as important U.S. trading partners such as India, Japan, and South Korea. Those partners’ attitudes would be heavily influenced by the perception of why the talks failed. Whichever side is seen as the spoiler would have a hard time finding allies.

Leaving the Negotiating Table, Entering the Blame Game

With a long-time special focus on the communications side of the nuclear dispute, Iran is ready to embark on a blame game the moment the talks end without an agreement.

The government wants to close ranks for reasons of self-interest—it does not want to end up on the losing side of the existing internal divisions between hardliners and moderates.

And it is also ready to engage in a battle for world opinion, true to its long-standing claim of fighting for the oppressed against the so-called imperialist powers, in particular when fighting for the nuclear rights of the have-nots vis-à-vis the nuclear haves. Its current chairmanship of the Non-Aligned Movement would help it become a spokesperson of the non-Western world.

The Iranian government is likely to raise two specific points in its outreach campaign.

First, the foreign minister has declared that if no agreement is reached, the government will make the last Iranian offer public. His aim is to tell the world exactly what the P5+1 refused. Iran will point the finger at the U.S. Congress in particular rather than the Obama administration, implying that a president willing to make a deal in principle was beholden to the Israel lobby in the legislature.

Second, Iran will contrast its compliance with the terms of the 2013 Joint Plan of Action that temporarily froze the country’s nuclear program with the list of new and extended sanctions from the United States since then. It will allege that Washington has been unwilling to compromise from the beginning and that it, the Iranian government, has in fact been duped into believing that a deal was to be had.

Washington Needs Friends

Amid all the predictions about what would come to pass if negotiations fail, the classic whodunit question is crucial. Both sides have an interest not only in getting to an agreement but also in not being seen as the party scuttling it.

While both Iran and the United States are certainly necessary for coming to any agreement (and an agreement between just the two might well be sufficient), the five other members of the P5+1—China, France, Germany, Russia, and the UK—are critical to avoiding a no-deal scenario. They can nudge both sides toward a compromise, and if it comes about, they can shape the agreement.

For the United States, compromising would mean turning away from a debate that is mainly driven by domestic pressure to be tough on Iran and instead focusing more on the quality of the deal itself. This implies that any agreement would have to be good enough for the Iranians to adhere to. European partners too would have to assess the deal positively, so the outcome would not be defined by the U.S. perspective only.

While the U.S. negotiators may be tempted to focus on the bilateral route and hammer out a deal with Iran, they must not lose sight of their European allies as well as the international partners. They need them as much for implementing a deal as for mitigating the consequences of not reaching one. Iran, which is strategically on its own but with states that are potentially sympathetic to its stance of nuclear defiance, has much less to worry about in this regard.

If no deal is reached, then European countries and the United States will have to be smart in devising a response with world opinion in mind. And they will need to shape the message of why talks failed through their actions as well.

Rather than churning out new sanctions, they should surprise their counterparts and wait for Iran to adopt a more aggressive course. That is because, if the negotiations have been labeled a Rubik’s Cube, the time after a failure could be like the game Mikado: whoever moves first could lose. At most, the United States should impose new sanctions but then immediately suspend them and only implement them if Iran takes certain actions or fails to take others.

Should Iran resume uranium enrichment or otherwise deviate from the terms of the interim agreement signed in November 2013, then the West is correct to respond. But if both sides stick to the status quo out of fear of being seen as the aggressor, this would amount to a de facto extension of the current agreement. This in turn would make it much easier to resume efforts to come to the diplomatic solution that both sides have implicitly placed their bets on, rather than one side choosing escalation and the other feeling compelled to reciprocate.

Interesting! World opinion is already shaping up on Israel and the heavy handed way in which they are handling the Palestinian issue. When the Republicans pass additional sanctions they will just be considered as extension of their Israeli masters. In the short term Iran will take a hit but in the long term the US will loose its position as the default currency.

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Javed Mir

December 05, 201411:12 am

--many Iranians expect that both Russia and China would provide escape routes for Iran, either by publicly disavowing the sanctions--
Simply put sanctions will not be productive. Let them be the active participants with the global growth and develop awareness that only by nuclear weapons will not strengthen their country nor their economy.

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